Note 3 - Liquidity

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

Note

3

– Liquidity

As of

December

31,

2016,

the Company had a cash balance of approximately

$64.6

million, and

$75.0

million of available borrowing capacity under the DIP Facility. As of

December

31,

2016,

the Company had borrowings totaling

$25.0

million associated with the DIP Facility, all of which are classified as a current liability on the consolidated balance sheet.

As of

December

31,

2016

and prior to Plan Effective Date, the Company's primary sources of liquidity were from cash on hand and borrowings under the DIP Facility. On the Plan Effective Date, the Debtors emerged from the Chapter

11

Proceeding, and in connection with the Restructuring Plan, the Company closed on the

$200

million Rights Offering. Proceeds from the Rights Offering were used to repay

$25.0

million associated with the DIP Facility, and the DIP Facility was canceled and discharged. On the Plan Effective Date, the Company entered into the New Credit Facility, which allows the Borrowers to incur revolving loans in an aggregate amount up to the lesser of

$100

million and a borrowing base, which borrowing base is based upon the value of the Company's accounts receivable and inventory. The New Credit Facility also contains an availability block, which will reduce the amount otherwise available to be borrowed under the New Credit Facility by

$20

million until the later of the delivery of financial statements for the fiscal year ending

December

31,

2017

and the date on which the Company achieves a fixed charge coverage ratio of

1.10:1.0.

The New Credit Facility also provides for the issuance of letters of credit, which would further reduce borrowing capacity.

As of

February

24,

2017,

the Company had a cash balance of approximately

$115.0

million and

$63.4

million of available borrowing capacity under the Company's New Credit Facility after taking into consideration the

$20

million availability block and the Company's current outstanding letters of credit of approximately

$15.1

million (see Note

5

- Debt and Capital Lease Obligations for defined terms).

The Company's ability to maintain adequate liquidity after emerging from the Chapter

11

Proceeding depends on its ability to successfully implement the Restructuring Plan, successful operation of its business, and appropriate management of operating expenses and capital spending. The Company's anticipated liquidity needs are highly sensitive to changes in each of these and other factors.